Armenia carries out pension reform

PanARMENIAN.Net - According to NASDAQ OMX CEO Armen Melikyan, the reform should have started back in 1991, when Armenia declared independence. It’s protraction damaged interests of the population, resulting in demographic problems, underdeveloped capital market and low diversification of economy.

Nevertheless, should pension reform start before the crisis, a large number of investment foundations could have lost their money.

Risk is needed but it must be sensible. Insufficient public awareness is one of the major problems in Armenia. There are apprehensions that such reform may become a subject of debates which that can spoil the entire mechanism.

Another problem is whether the funded pension scheme should be obligatory or optional. The government has decided that the reform will kick off January 1, 2011 as optional. Obligatory system will take effect January 1, 2014.

Armenia is capable to carry out pension reform within terms set by the government, according to Daniel Wartonick, Chief of Party of USAID Armenia Pension and Labor Market Reform Project (PALM).

“The government has set reasonable terms. Moreover, the reform will help the republic’s economic growth,” he told a PanARMENIAN.Net reporter on the sidelines of a seminar organized in Tsaghkadzor by the USAID PALM, RA government’s working group on implementation of pension reform public awareness program and European Union Advisory Group to the RA.

“Pension reform is a complicated process and public awareness and approval is an essential part of it. The USAID will render the essential technical assistance to the Armenian government,” he said.

“As to capital outflow, it’s an urgent problem for a large number of countries and to control it, the government should collaborate with the assets managers, employers. Besides, raising of public awareness and cooperating with financial negotiators would be very useful,” Mr. Wartonick said.